We are the establishment, and we are the problem

We are the establishment – the chattering classes that also broadly represent the elite class.

Think of the last eleven years (the period the blog has been in existence), and if we care to ask ourselves, can we claim that we don’t possess a “fixed mindset”? In other words, has our worldview changed?

For example, we know that the Constitution explains why ours is a closed economy. Some of us can assert that we can pick up the phone and speak to the powers that be – because we are the establishment.

Of course, we now say that there is consensus that we must undo the restrictive economic provisions of the Constitution. That is why the blog has raised the challenge of a “growth mindset” and the imperative to “forward-think.” What do we do? Do we wait? If not, now, when?

To forward-think may sound “innovation-speak,” although Jeff Bezos calls it a “simple” mind trick, which he did as he contemplated leaving his Wall Street job many years ago. He began by imagining what it would be like to start his own company. “The best way to think about it was to project my life forward to age 80,” [by picturing his life that far in advance, the decision to quit his job on Wall Street and start an online bookstore became immediately apparent]. [https://apple.news/ACZ3YMQlWRQafdZe5_V2Ydg]

Likewise, the blog has brought up some fundamental givens in neuroscience, i.e., the chamber of the brain that does linear, logical and quantitative work is well developed but the one that is responsible for lateral and creative thinking as in connecting the dots is not.

We can all feel the relief; we aren’t talking about IQ per se.

So, the blog has challenged our economic managers, i.e., because of our lack of experience in development – especially the multidisciplinary approach, thus our perceptive judgment – we did not run with the ball of Arangkada.

Classical economics is laissez-faire, as in trickle down. And that is how we grew up. But then came the Asian Tigers, and then China, and most recently, Vietnam.

Let’s take Thailand and Vietnam so that we don’t just give up as we did on Singapore, being too far advanced.

Still, Thailand and Vietnam are no pushovers versus the Philippines because of their progress in export development. Thailand’s exports are almost five times bigger than ours, and Vietnam’s are about 4.5 times.

In other words, “Build, Build, Build” and managing inflation and tax reform and promoting POGO because of its impact on the property market, among others, will not close the gaps ($187-B vs. Thailand and $166-B vs. Vietnam) in our export performance, the key driver of the economies of our neighbors.

Here’s what the financial institution, HSBC, tells investors: “Vietnam has a sliding scale of investment incentives for new businesses that consider the size of the investment, the number of employees, and the location of the company. 

“Some foreign manufacturers are also investing in more sophisticated manufacturing in the country, with Samsung planning to open research and development centers in Hanoi, and Apple reportedly considering a similar move.

“These developments foreshadow a gradual evolution from high-volume electronics manufacturing to more highly skilled manufacturing techniques and applications over the next five years.

“This will enable Vietnam to stay ahead of the competition from South Asia, overtake Malaysia, which has traditionally been a manufacturing hub for MNCs and continue to be the go-to destination for diversifying production from China.

“Newer markets like Myanmar and Cambodia can undercut Vietnam on labor costs. However, they cannot offer Vietnam's advantageous geographic location next door to China, or compete with its fast-improving infrastructure, overall ease of doing business, and political stability. 

“Vietnam also has a growing number of trade agreements, including the restructured Trans-Pacific Partnership, and free trade deals with both the European Union and South Korea, which are vital to the electronics sector.

“Both Thailand and Vietnam are already advancing their manufacturing base, processes, and skills, but opportunities are rife for new investments to facilitate the process of transition from simply training workers to developing better infrastructure integration.”

We are playing catch up big time. Yet, every initiative we crow about doesn’t go beyond the obvious. Or what we believe is logical. [See above, the fundamental givens in neuroscience.]

Consider these examples, among others:

(1) C-5 was obvious and logical to ease Edsa traffic; instead, we created two monsters.

(2) Comprehensive land reform was to be another feather in our cap, yet poverty and mediocre agriculture productivity persist.

(3) OFW remittances were supposedly manna from heaven.

(4) The BPO industry will be the engine of our service economy and, just like the OFW phenomenon, will address unemployment and poverty. What happened?

Everyone has his or her example of such interventions, all being obvious and logical. We now know what reality is.

(1) We are decades behind in infrastructure development. No one even wants to come near C-5 and Edsa, for example. So, the writer wanted to experience this reality and drove through these monsters and now deserves a Manila souvenir t-shirt: “I survived Metro-Manila’s monster traffic.” 

But he now knows firsthand how we waste billions in productivity and deserve being the regional laggard. We must stop talking about poverty. “Talk” is cheap.

Beyond Metro-Manila traffic, we know we are decades behind in developing our water source, among others. Why?

(2) Rural poverty and inferior agriculture productivity will continue to define us.

(3) If we want a joke for the day amid our reality, read how we continue to spin the virtues of overseas employment for Filipinos. The media is complicit here too. Can this be the area where our economists can provide guidance?

For example, instead of focusing on how our service-consumption economy and tax reform and inflation management can sustain economic growth, they can pave the way for a new paradigm, an industrial-investment economy. See above the gaps in our export performance. 

Arangkada and the DTI are looking at industries that can give us a quantum leap. Our economists can dissect these industries and identify which will provide the biggest bang for the buck. And that can drive how we prioritize investments and which technology to tap. That can include countries and foreign companies we must woo.

Which in turn, should tell us how to prioritize infrastructure projects and other critical (not everyone and his uncle) sectors that taken together will provide us a robust platform to drive economic development and prosperity. (Of course, that is a broad-stroke idea. Yet, in the private sector, these broad stokes have turned into world-beating initiatives worth billions of dollars.)

It should then give our economists the wherewithal to influence media and government on our national agenda. We don’t need a Ph.D. dissertation that is more for course credit than execution.

(4) We don’t like the BPO industry to be left behind by innovation. Even our call centers aren’t bulletproof. Yes, we are a cheaper alternative to US-based call centers. But the latter is more productive because of language, English is native to them. An American friend is relocating to Manila to train our people on American small talk, which may do the trick. Still, we must move up the value chain if we are to compete and win in this industry.

As the blog has pointed out a few times, the simplest model to guide us to traverse the road from poverty to prosperity is to think of the GPS model: (a) Where are we? (b) Where do we want to be? (c) How do we get there?

By now, we should be able to figure out that the biggest hurdle in this process is our blinder, and why we can’t honestly answer the question: Where are we?

Consider our instincts: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

Unsurprisingly, we would instead conflate the problems of the world. We would instinctively point to the weaknesses of the West or the downsides of 21st-century technologies. 

Why? They come from our hierarchical and paternalistic bias. We rank lower and are entitled to protection from wealthier Western powers; otherwise, we are resentful, thus our criticisms. Yet, we can turn our ego need on its head and acquire a positive worldview: Aha, the West is vulnerable, we can be as good if not better than them.

There is a moral to the David and Goliath story. Let’s look at Singapore or the leadership of Lee or Mahathir or Deng.

It also explains why our perspective of MSMEs is limited to livelihood undertakings. There is a fundamental reason the writer signed up to be a development worker in the most impoverished nation in Europe. And that is why the message he stressed at the outset is, “you are in this business because you believe you can be competitive against Western global behemoths. If not, you ought not to be in it.”

Similarly, it explains why we kicked out the US military. Do we realize now (learning from the Trump impeachment) why Ukraine relies on American military aid, to the tune of $400 million? Ukraine housed the USSR’s version of NASA in its heyday. They still are in the rocket business, putting satellites up in space for other countries’ needs like weather monitors or communication transmission. Disclosure: The writer has a Ukrainian friend who was a rocket scientist under Soviet rule. Today he runs the Ukraine business plus five neighboring countries of his friends. He did not turn into a managerial talent overnight. But he developed very quickly.

And we think we can rapidly build our military infrastructure – more than Ukraine can – without relying on the West?

Our short-sightedness is not to be ashamed of and minimized. To be growth-oriented and to forward-think aren't characteristics that are a dime a dozen. They are exceptions. 

What we need is to recognize that ours is a fixed mindset so that we can begin to unfreeze our minds to accept and accommodate a new paradigm. See above industrial-investment economy, for example, that will seek out technology, including countries and foreign companies.

The poor may be too deep in survival mode that they may have no room to forward-think. 

But we in the chattering classes and the establishment aren’t – except of course if we want to protect the status quo because rank has its privileges – and can hone our capacity to forward-think.

The ball is in our court.

Gising bayan!

“Why independence, if the slaves of today will be the tyrants of tomorrow? Moreover, that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“Now I know why Paul dared to speak of ‘the curse of the law’ (Galatians 3:13). Law reigns and discernment is unnecessary, which means there is little growth or change in such people. When you do not grow, you remain an infant.” [Faith and Science, Open to Change, Richard Rohr’s Daily Meditation, 23rd Oct 2017]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists, and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“National prosperity is created, not inherited. It does not grow out of a country’s natural endowments, its labor pool, its interest rates, or its currency’s value, as classical economics insists. [A] nation’s competitiveness depends on the capacity of its industry to innovate and upgrade.” [The Competitive Advantage of Nations, Michael E. Porter, Harvard Business Review, March–April 1990]

“You have to have a dream, whether big or small. Then plan, focus, work hard, and be very determined to achieve your goals.” [Henry Sy Sr., Chairman Emeritus and Founder, SM Group (1924 - 2019)]

“Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.” [William Pollard, 1911-1989, physicist-priest, Manhattan Project]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]